A Melbourne landlord recently found themselves in hot water after their tenant pointed out an invalid rent increase. The tenant alerted the agent to the improper reasoning given for the increase and was subsequently back-paid for the invalid increase.

As a landlord, it is important you know the ins and outs of increasing rent so that you don’t get caught out.

How much rent can increase by?

Although the law doesn’t explicitly say how much you can increase rent by, it does require that you give your tenant information about how you calculate the increase. This means you must show that the notice of rent increase provides for a specific amount and that the increase has been calculated according to those provisions.

Common methods for calculating rent increases are:

  • The consumer price index
  • The metropolitan rent index or regional rent index
  • A fixed percentage
  • A fixed dollar amount

The wording used in your notice of rent increase or lease must be precise and specify the exact amount or percentage you are increasing rent by and the reasoning.

How often rent can increase?

When you can increase rent depends on your rental agreement and when it was signed. You are not able to increase rent during a fixed-term agreement unless the lease says this is allowed. In most cases, rent can only be increased every 12 months.

How should you notify tenants of an increase?

News of an increase must be given to the tenant at least 60 days before the price goes up. The written notice of rent increase must explain:

  • How much rent will increase by
  • How the increase was calculated
  • What recourse is available to the tenant if they think the increase is too high

Adam Zuchowski is a disputes lawyer and principal at Sutton Laurence King Lawyers.

Need help with a rental dispute? Contact Sutton Laurence King Lawyers today on 03 9070 9810 or email .